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12-04-2019, Krishnapatnam Port, Section 201(1), 192, 194C, Tribunal Hyderabad

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5 days 21 hours ago #9163 by amit
Section - 201(1), 192, 194C, 234B, 271C, 133A
Order Date - 12-04-2019
Favouring - Allowed for statistical purposes
Court - Tribunal Hyderabad
Appellant - DCIT
Respondent - Krishnapatnam Port Company Limited
Citation - 419Taxpundit198
Appeal No. - ITA No. 275/Hyd/18
Asstt. Year - 2011-12



These appeals are filed by both Assessee and Revenue against the order of the Commissioner of Income Tax (Appeals)-8, Hyderabad. Since the facts and issues involved in all these appeals are common and identical, all these appeals are heard together and are being disposed by way of this common order for the sake of convenience.

Condonation of delay:

2. As far as the Revenue appeals are concerned, the Revenue has filed these two appeals with a delay of 03 days. For that Revenue has filed affidavits, seeking condonation of delay in filing the appeals.

2.1. Considering the petitions for condonation of delay in respect of Revenue and being satisfied with the reasonable cause for the delay, we hereby condone the delay in filing the appeals, which are admitted being heard on merits.

First of all, we shall discuss herewith the appeals relating to Section 201(1) & 201(1A) of the Act For the sake of clarity, facts relating to assessee’s appeal in ITA No. 318/Hyd/2018 are discussed hereunder:

3. Brief facts o the case are that assessee-company is engaged in the business of construction and operation of sea port at Krishnapatnam, Nellore District, Andhra Pradesh. A TDS survey u/s. 133A of the Income Tax Act [Act] was conducted in the business premises of the assessee-company on 12-09-2013. During the survey, it was observed that the assessee-company did not adhere to the provisions of TDS in respect of deduction under certain sections and remittance of the same in to Government account within the statutory due dates. Accordingly, notices were issued and served on the assessee. On the basis of the information available and examination of books, it is noticed that assessee has made payment to the extent of Rs. 331.38 Crores during the month of May, 2010 and June, 2010 to M/s. Navayuga Engineering Company Limited (NECL), an EPC contractor of the assesseecompany and sister concern. On verification of the records, it is noticed that assessee has made TDS deduction for an amount of Rs. 272.13 Crores @2% on 31-03-2011 and the same was remitted to the Government account on 04-08-2011. Out of the balance amount of Rs. 59.24 Crores, Rs. 54.24 Crores was paid to M/s. Navayuga Udipi Tollway Private Limited (NUTPL) towards share application money. But it was debited to the account of NECL, EPC a/c. The assessee has admitted to the extent of Rs. 5 Crores, no TDS was made during this period. Acc rdingly, the Assessing Officer made additions u/s. 201(1) & 201(1A) of the Act of Rs. 5 Crores as well as Rs. 54.25 Crores Further, the Assessing Officer noticed that assessee has not remitted the TDS in to the account of Central Government within the time and calculated u/s. 201(1A) interest for the delay in remittance to the Government a/c.

3.1. Aggrieved with the above order, assessee preferred an appeal before the C T(A).

4. Before the Ld.CIT(A), assessee submitted regarding TDS of Rs. 5 Crores, as under:

“The AR submitted that M/s. NECL, to whom the said payment of Rs. 5 crores was made without effecting TDS, has since filed the return of income for the A.Y. 2011-12 and admitted the amount of Rs. 5 crores as receipts and in support of the same, acknowledgement page of the return of NECL was submitted. The AR submitted that as per the judgment of Supreme Court in the case of CIT vs. Hindustan Coca-cola Beverage Ltd. (293 ITR 226), when the payee has admitted the receipts in its return of income, the payer should not be held to be an assessee in default and therefore the computation of short deduction uls 201(1) may be deleted. With regard to Interest u/s 201(1A), it was submitted that the AO charged interest upto the month of the assessment order where as it should have been levied only upto the date of payment of tax by the payee”.

4.1. Regarding the said issue, the Ld.CIT(A) held as under:

“5. I have considered the issue and submissions made by the AR. The appellant payer shall not be held to be an "assessee in default” only if the payee has furnished his return of income u/s. 139; has taken into account such sum for computing the income; and has paid the tax due on the income declared by him; and furnishes certificates to this effect from an accountant in Form No. 26A as per Proviso to section 201(1). In the present case, the certificate by the accountant in the prescribed form i.e. Form 26A was not furnished by the appellant. Since the conditions laid down in the proviso to Section 201(1) have not been fulfilled, the assessee is held to be an "assessee in default" and the demand raised by the AO u/s.201(1) is upheld.

As regards the levy of interest u/s. 201(1A), since the appellant failed to furnish the said certificate i.e. Form No. 26A from an accountant in respect of the payee, interest shall be leviable from date of crediting the said amount in the books of account of the payer till the date of passing of the impugned order. Therefore, interest levied by the AO u/s. 201(1A) of Rs. 5,70,000/- is upheld and the ground of appeal is dismissed”.

5. Before the Ld CIT(A), assessee submitted regarding payment of Rs. 54.24 Crores, as under:

“The AR submitted that the said amount was transferred through RTGS from the ICICI Bank of the appellant to the Bank account of NUTPL towards share application money and submitted a copy of the letter written by the appellant to ICICI Bank for transfer funds thru RTGS to NUTPL and also copy of the ICICI Bank statement evidencing the transfer of said funds on 25.06.2010 to NUTPL, which have been produced before the AO. The fact is that NUTPL allotted shares to the appellant company and the AR enclosed relevant minutes of NUTPL in this regard. The appellant also furnished audited Balance Sheet (Schedule - 6) of the appellant as on 31.03.2011 wherein, the said amount was shown as investment in the shares of M/s. NUTPL. The entire confusion happened due to posting of wrong entries in the Ledger, which have been corrected later. The AR submitted that the AO misdirected himself by treating the said amount as towards execution of contract by NECL and not towardsshare application money in NUTPL In spite of producing ail the relevant evidences like Bank statement of the appellant evidencing the transfer of

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